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Item 5. Market for Registrant’s Common Equity

2023-03-08 compared with 2022-03-17 · 34 added, 20 removed, 38 unchanged (59% of the section changed)

4 unchanged sentences

since August 11, 2015, and "USIO" since June 26, 2019. 

On March 10, 2022, 25,533,013 shares of our common stock were issued and outstanding.

On March 3, 2023, 26,392,315 shares of our common stock were issued and outstanding.

As of March 3, 2023, there were 3,548 stockholders of record of our common stock.

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Refer to Item 12 of Part III of this annual report on Form 10-K for additional information.

Recent Sales of Unregistered Securities;

Use of Proceeds from Registered Securities

Since September 30, 2021, we issued the following unregistered securities.

On November 19, 2021, we issued 142,857 shares of common stock valued at $7.00 per share to Voyager Digital Holdings, Inc in a private placement.

We relied on the Section 4(a)(2) exemption from securities registration under the federal securities laws for transactions not involving any public offering.

No advertising or general solicitation was employed in offering the securities.

The securities were issued to an accredited investor.

The securities were offered for investment purposes only and not for the purpose of resale or distribution.

The transfer thereof was appropriately restricted by us.

Sales of Unregistered Securities

On August 21, 2018, the Company issued University Fancards, LLC a warrant to purchase 150,000 shares of the Company's common stock.

30,000 warrants vested immediately upon the date on which the first financial transaction was processed on a card account issued under the prepaid agreement, which occurred on October 5, 2018.

120,000 warrants vest annually over 4 years in 30,000 warrant increments beginning on July 31, 2019 and becoming fully vested on July 31, 2022.

The exercise price for the 30,000 warrants that vested immediately on October 5, 2018 was $1.80 per share.

The exercise price for the remaining 120,000 warrants will be the lesser of $2.00 per share or one hundred and twenty percent (120%) of the market price of the Company's common stock on the vesting date of the warrant.

The warrants were valued using the Black-Scholes option pricing model.

Assumptions used were as follows:

(i) the fair value of the underlying stock was $0.94 for the 30,000 warrants and $0.90 for the 120,000 warrants;

(ii) the risk-free interest rate is 2.77%;

(iii) the contractual life is 5 years;

(iv) the dividend yield of 0%;

and (v) the volatility is 64.6%.

The fair value of the warrants amounted to $135,764 and will be amortized over the life of the warrants as a reduction of revenues.

The reduction of revenues recorded for the year ended December 31, 2022 and 2021 was $20,963 and $35,940 respectively.

On August 12, 2020, the Company issued 27,051 shares of common stock to University FanCards, LLC in a cashless exercise at $3.46 per share in exchange for 60,000 warrants exercised by FanCards, LLC. 

On February 5, 2021, the Company issued 19,795 shares of common stock to University FanCards, LLC in a cashless exercise at $5.88 per share in exchange for 30,000 warrants exercised by FanCards, LLC. 

On September 1, 2021, the Company issued 19,950 shares of common stock to University FanCards, LLC in a cashless exercise at $5.97 per share in exchange for 30,000 warrants exercised by FanCards, LLC.

On December 15, 2020, the Company issued warrants to purchase 945,599 unregistered warrants to purchase shares of Usio, Inc.

for 945,599 shares of our common stock, with an exercise price of $4.23 to IMS. 

The warrants were valued using the Black-Scholes option pricing model.

Assumptions used were as follows:

(i) the fair value of the underlying stock was $0.58;

(ii) the risk-free interest rate is 0.09%;

(iii) the contractual life is 5 years;

(iv) the dividend yield of 0%;

and (v) the volatility is 59.9%.

The fair value of the warrants amounted to $552,283 and will be recorded as an increase in the customer list asset and have a term of five years from time of vest.

All of the warrants described above and the shares of common stock issued upon exercise of the warrants were issued pursuant to the exemption set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

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On November 7, 2019, the Board of Directors approved the renewal of the share buyback program.

The Board approved a limit of $1,420,000 which was rolled over from the prior buyback program with a three-year duration.

The new buyback program terminates on the earliest of September 30, 2022, the date all funds have been exhausted, or the date the Board of Directors, at its sole discretion, terminates or suspends the program.

The Board of Directors ratified share purchases between September 29, 2019 and November 7, 2019 and such share repurchases count against the newly approved dollar limit.

$ 881,662 were available at December 31, 2021 under this program.

The following table shows our recent stock purchases under the buyback plan as of December 31, 2021:

The Board approved a limit of $1,420,000 which was rolled over from the prior buyback program with a three-year duration. On May 13, 2022, the Board of Directors authorized a renewal of the buy-back program, with a limit up to $4 million of the Company's common stock with a three year duration. The new buyback program terminates on the earliest of May 15, 2025, the date the funds are exhausted, or the date the Board of Directors, at its sole discretion, terminates or suspends the program.

The program is used for the purchase of stock from employees and directors, and for open-market purchases through a broker.

The following table shows our fourth quarter of 2022 stock purchases under the buyback plan as of December 31, 2022:

Maximum number (or

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December 1, 2022 to December 31, 2022

On January 6, 2020, we repurchased 11,860 shares for $20,636 in a private transaction at the closing price on January 6, 2020 of $1.74 per share from Tom Jewell, the Company's Chief Financial Officer, to cover his share of taxes.

On November 1, 2020, we repurchased 54,756 shares for $86,399 in a private transaction at the closing price of $1.5779 on October 15, 2020 per share from Louis Hoch, the Company's Chief Executive Officer to cover his share of his taxes.

On January 6, 2021, we repurchased 11,860 shares for $38,545 in a private transaction at the closing price on January 6, 2021 of $3.25 per share from Tom Jewell, the Company's Chief Financial Officer, to cover his share of taxes.

On January 6, 2022, we repurchased 11,361 shares for $47,930 in a private transaction at the closing price on January 6, 2022 of $4.21 per share from Tom Jewell, the Company's Chief Financial Officer, to cover his share of taxes.

SELECTED FINANCIAL DATA.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

On October 4, 2022, we repurchased 26,234 shares for $42,761 in a private transaction at the closing price on October 4, 2022 of $1.63 per share from Louis Hoch, the Company's Chairman, President, Chief Executive Officer and Chief Operating Officer, to cover his share of taxes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity